- 5,884
Foregive me... bouncing between threads and just read the above... brain moving slower than my fingers and eyeballs.
10% Penalty on Annuity
- Thread starter Julieolo
- Start date
- 11,457
I'd contact John Olsen for a consultation with him. He has written SEVERAL books and been an expert witness for many of the most complex cases involving annuities.
Consulting services for CONSUMERS
This is his book about Annuities that is geared for consumers:
Amazon product ASIN 1521379599
You can tell him that David Kinder sent you. I'm connected with him on LinkedIn and we've had several in-depth conversations on various things over the years on various platforms.
Consulting services for CONSUMERS
This is his book about Annuities that is geared for consumers:
Amazon product ASIN 1521379599
You can tell him that David Kinder sent you. I'm connected with him on LinkedIn and we've had several in-depth conversations on various things over the years on various platforms.
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- 5,884
You need face to face on things like this in my mind. Maybe some advice as to where to look and new perspective, but contract review on forum? Do you guys that have been here for awhile get this kind of stuff often?
- 11,457
Yep - these things come up. I rarely give advice on such things to consumers, but this one, as far as the thread is shaping up to be - is a slam dunk.
To get face-to-face without someone else's bias showing up... can be difficult. This needs to be a consultation that is paid for, with a separate engagement agreement with someone who can really tell you what's going on. John Olsen is one such person and truly is an industry expert on these things. Since he offers consulting on a fee basis, this is an easy recommendation for me to make.
Even financial planners that charge fees may not analyze the contract correctly, or just say "you were ripped off with this contract". In California, there are insurance analysts that are licensed to charge fees to analyze contracts, but they are specifically for life and disability, rather than including annuities in that definition.
I'd prefer someone who actually knows annuities to consult with - and I can highly recommend John Olsen. (I may disagree with him for his political views, but he's spot on for annuities.)
To get face-to-face without someone else's bias showing up... can be difficult. This needs to be a consultation that is paid for, with a separate engagement agreement with someone who can really tell you what's going on. John Olsen is one such person and truly is an industry expert on these things. Since he offers consulting on a fee basis, this is an easy recommendation for me to make.
Even financial planners that charge fees may not analyze the contract correctly, or just say "you were ripped off with this contract". In California, there are insurance analysts that are licensed to charge fees to analyze contracts, but they are specifically for life and disability, rather than including annuities in that definition.
I'd prefer someone who actually knows annuities to consult with - and I can highly recommend John Olsen. (I may disagree with him for his political views, but he's spot on for annuities.)
- 10,703
If I were in your position, I would first give the Insurance Carrier a chance to correct the situation.
I would not even research lawyers until they have given you a "final" decision. (the first final decision can always be appealed)
The advisors firm is not the one who makes decisions related to the Annuity. They literally have zero control over the situation. (they could certainly advocate for you, but clearly they are not)
The Insurance Carrier is the only one that can fix this situation and make things right. At this point, they are the only ones you need to be speaking with about this. Leave the "advisor" out of the loop as there is no need for him or his firm at this point.
- 15,041
If everything is as presented, or even remotely close, I suspect the carrier will quickly work to rectify the situation. They may reverse the annuity, but I recall reading that can get real interesting if there have been gains or withdrawals.
- 10,703
Do you have the Policy (contract) they gave you? Usually, they give you a bound document with the annuity contract and provisions within it.
Often, they have a copy of the original application you filled out and signed in that document. Usually near the back of the document.
That would be very helpful for you to have. Find the section asking about your financial info and financial goals. Are those questions correct? If not, the Insurance Company needs to know that.
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Here is the big question I have about this whole thing:
What was the discussion? What did you come to the agent asking for and what did he tell you?
Did he provide any sales material or documents or emails laying out a plan or giving you a recommendation on what you should do and what it will do for you?
You need to get all the documentation you can in this situation. And as an agent, those are big question marks in my mind. What did you tell him you wanted or needed with you money?
And are we talking about a large amount here? That always runs through my mind too...lol.
Also, if you shared the name of the Insurance Carrier it would be safe to do so. It is probably a good idea not to share the name of the financial advisors firm. The Insurance Carrier wouldnt be an issue, and we could tell you what kind of reputation that carrier has.
- 10,703
OK David... it looks like we need to look up the IRC code. Im going to check some carrier websites tonight and see if they have any material that covers it. Maybe advanced marketing has something definitive.
Or maybe its just one of those grey areas in the IRC and each carrier has their own interpretation.... LOL.
But she has now had 2 compliance people tell her it includes basis. And for some reason I just think my training years ago at NYL taught me it included basis too. IDFK... but Im sure as hell gonna err on the side of caution! LOL
- 11,457
In my opinion, I think they're not being precise in their wording - perhaps on purpose?
If a withdrawal includes interest and principal, it will have a 10% penalty, but only applied to the interest as the rest is return of basis.
But I agree that I'd like to see more of the IRC or an IRS publication to shed more definitive light on this.
If a withdrawal includes interest and principal, it will have a 10% penalty, but only applied to the interest as the rest is return of basis.
But I agree that I'd like to see more of the IRC or an IRS publication to shed more definitive light on this.
- 10,703
I have heard of them just topping off the account value with the amount the person has to pay in taxes. Or just cut them a check for the amount they have/will pay.
The OP could probably get out of it if they complained loud enough. (assuming facts presented are correct)
Idk for sure, but Id imagine the carrier would be fairly generous, especially if the OP was talking about filing a complaint with the DOI over this. If there is an investigation, they want to be seen as having done the right thing.
You just never know sometimes. But I agree the carrier is likely to fix things.
